A Response To a Canadian's Pro-Obama Viral Letter

The Detroit Free Press on Nov. 7 published a viral letter to the editor:

Americans don't know how good they have it with Obama

Many of us Canadians are confused by the U.S. midterm elections.

Consider, right now in America, corporate profits are at record highs, the country's adding 200,000 jobs per month, unemployment is below 6%, U.S. gross national product growth is the best of the Organization for Economic Cooperation and Development (OECD) countries.

The dollar is at its strongest levels in years, the stock market is near record highs, gasoline prices are falling, there's no inflation, interest rates are the lowest in 30 years, U.S. oil imports are declining, U.S. oil production is rapidly increasing, the deficit is rapidly declining, and the wealthy are still making astonishing amounts of money.

America is leading the world once again and respected internationally — in sharp contrast to the Bush years. Obama brought soldiers home from Iraq and killed Osama bin Laden.

 So, Americans vote for the party that got you into the mess that Obama just dug you out of? This defies reason.

When you are done with Obama, could you send him our way?

Richard Brunt
Victoria, British Columbia

Let me enlighten Mr. Brunt; I realize that Canadians can't understand American healthcare given the nirvana of Canadian socialized medicine:

Of Canada’s approximately 33 million people, at least 800,000 are currently on waiting lists for surgery and other necessary medical treatments. Between 1997 and 2006, the median wait time between a referral from a primary-care doctor for treatment by a specialist increased from 9 weeks to more than 18 weeks. A study entitled Waiting Your Turn: Hospital Waiting Lists in Canada, conducted by the Vancouver-based Fraser Institute, reports that Canadian health care patients must wait, on average, 17.7 weeks for admission to a hospital.

In a May/June 2004 article in the journal Health Affairs, researcher Robert Blendon and colleagues reported that in Canada, the average wait time for a 65-year-old man requiring a routine hip replacement was more than six months. By contrast, 86 percent of American hospital administrators reported that the average wait time for such a procedure in the U.S. was less than three weeks.

And who doesn't admire Canada's limits on free expression:

Canada, England, France, Germany, the Netherlands, South Africa, Australia and India all have laws or have signed international conventions banning hate speech. Israel and France forbid the sale of Nazi items like swastikas and flags. It is a crime to deny the Holocaust in Canada, Germany and France.

My ancestors knew better when they emigrated from Quebec in the nineteenth century. I have no interest in visiting Canada, and I've turned down opportunities to work there. But let me enlighten Mr. Brunt: I'll join with millions of other Americans in chipping in to export Obama to Canada on the provision you agree to keep him. I'm sure you'll find him "helpful", say, in managing your end of the Keystone Pipeline or in charge of your healthcare websites... But now, let's look at the letter:

Consider, right now in America, corporate profits are at record highs, the country's adding 200,000 jobs per month, unemployment is below 6%, U.S. gross national product growth is the best of the Organization for Economic Cooperation and Development (OECD) countries.

Naive, misleading understanding of the American economy. First, we have the lowest labor force participation rate in decades. A lot of the reason the official unemployment is down is because long-term unemployed/discouraged workers are essentially dropped from the workface statistics which arbitrarily lowers the rate; those prospective workers did not disappear. Now granted statistics may be slightly better than 6 months ago from this spring's (liberal) Economic Policy Journal, but:

In today’s labor market, there are nearly 1 million “missing” young workers—potential workers who are neither employed nor actively seeking work (and are thus not counted in the unemployment rate) because job opportunities remain so scarce. If these missing workers were in the labor market looking for work, the unemployment rate of workers under age 25 would be 18.1 percent instead of 14.5 percent.

For young college graduates, the unemployment rate is currently 8.5 percent (compared with 5.5 percent in 2007), and the underemployment rate is 16.8 percent (compared with 9.6 percent in 2007). In 2007, 38 percent of employed college graduates under age 27 were working in a job that did not require a college degree, and this share increased to 44 percent by 2012. Furthermore, the “non-college” jobs that workers with a college degree are ending up in are of lower quality now than they used to be. (For comparison, the unemployment rate for all college grads over the age of 25 is 3.3 percent, which is also still higher than normal.)

Since 2000, the real (inflation-adjusted) wages of young high school graduates have dropped 10.8 percent, and those of young college graduates have dropped 7.7 percent. For young high school graduates, the unemployment rate is 22.9 percent (compared with 15.9 percent in 2007), and the underemployment rate is 41.5 percent (compared with 26.8 percent in 2007).

Keep this in mind: we need at least 150,000 jobs a month just to keep up with new workers entering the labor force from school. So even if we've had a string of 200,000 jobs a month, that's barely a drop in the bucket of millions long-term unemployed, a lot of the jobs are low-quality and/or part-time, we have up to 29% of adults under the age of 35 living at home, In many cases, employers have reduced part-time hours because of various government compensation policies (e.g., minimum wage and healthcare mandates). In fact, Obama is trying to raise the dysfunctional minimum wage even with massive surpluses of unemployed teens and young adults; all this will do is structurally price inexperienced, unskilled people out of the job market. Employers have already pointed out the economic fact of life that when you raise the cost of labor, including ObamaCare mandates, it adversely affects the number of work-hours and/or employees. Young college students and graduates have faced the staggering inflation of college costs, leaving many thousands in debt, sometimes having to defer marriage or buying a house,

Median household income as of 2013 was still 8% below pre-recession highs and even below 1999. Median net worth is even worse as of 2013--43% below pre-recession and over a third less than a decade ago. Whereas upper-end real estate and stocks have recovered since 2007, this isn't relevant to other income groups. Let's look at a report from this spring:

According to a new Zillow report, 18.8% of U.S. homeowners with a mortgage, or 9.7 million households, were underwater on their mortgages at the end of the first quarter. That's an improvement from the end of last year when this figure was 19.4%, and it's a large improvement from a peak of 31.4% in 2012. But it shows that negative equity is still an issue in the housing market.

What's more, there is an additional 10 million households, Zillow reports, that have 20% or less equity in their homes. For those homeowners, it would be difficult to sell without coming up with some money to cover the broker fees, closing costs and the down payment for the next home. Typically sellers use their home equity to cover these costs.

Yes, it is true that corporate income is at highs, but companies are hoarding cash vs. making job-growing capital investments, a lot of which has to do with declining economic freedom on every comparative index under the Obama administration, the US is only one of a handful of OECD  countries still maintaining a global vs. territorial tax system, we have the highest business tax brackets in the OECD, and this President has increased taxes on investment. Yes, GDP is increasing, but we've had the slowest jobless recovery in decades, for the most part we've been growing well below the long-term 3% historical average, and China recently overtook us on a purchasing power basis. This is one of the most anti-business administrations in American history, we have a $1.8T regulatory burden, Obama has more than doubled the publicly-held debt, which competes for investment dollars to the point of crowding out private sector investment and hasn't done anything with unfunded entitlements which have been estimated at from $80 to $200T and really adds at least $5T on top of the existing federal deficit each year. [A number of the OECD countries are suffering from unsustainable social welfare programs, dysfunctional labor policies,  below-replacement birth rates, etc.]

The dollar is at its strongest levels in years, the stock market is near record highs, gasoline prices are falling, there's no inflation, interest rates are the lowest in 30 years, U.S. oil imports are declining, U.S. oil production is rapidly increasing, the deficit is rapidly declining, and the wealthy are still making astonishing amounts of money. America is leading the world once again and respected internationally — in sharp contrast to the Bush years. Obama brought soldiers home from Iraq and killed Osama bin Laden.

Yes, the dollar is currently strong, no thanks to monetary policy, because low interest rates from Fed manipulation discourage purchases, not to mention the Fed has recently been monetizing Treasury debt. It has more to do with the weakness of other currencies (the euro and yen are being pressured by easy money policies), the world reserve status of the dollar, and global tensions in Eastern Europe (i.e., Ukraine) and the Middle East/Gulf region. It's true that stocks have improved but are mediocre if you peg from year 2000 and adjust for inflation (the Nasdaq is still significantly below its 2000 high). Gas prices are dropping more because of a strong dollar, Saudi Arabia pumping more oil onto a saturated market for multiple purposes (to maintain market share, to combat higher-cost US shale oil production). US oil production has increased, but not because of Obama, but despite him: almost all the increase is off privately or state-held land, and his environmentalists fight exploration and development on federal areas (and other areas) every step of the way. The deficit is declining only because the GOP has held the House since 2011; in fact, the federal budget has grown by nearly $1T since the Democrats won control in Congress in 2006, and Obama not only went apeshit off a modest 2% sequester cut, but shut down the government rather than accept budget concessions. Moreover, tax receipts are only now reaching second Bush Administration term figures.

The wealthy have mostly profited from unprecented QE and ZIRP Fed policy of 6 years, which have resulted in asset inflation (I guess Canadian "progressives" don't understand the concept of inflation); ask ObamaCare policyholders whether those increases are real, ask college students whether their tuition cost increases are real (just about anything government touches is costlier), and ask grocery shoppers whether their food costs the same it did 6 years ago. In fact, the Fed tries to hit a 2% inflation target--although it loans out money at nearly zero rates. Depositers actually lose purchasing power by keeping money in the bank.

As for Obama's foreign policy, he more than doubled the Afghanistan casualties from Bush's longer watch, Obama never closed Gitmo, and more than doubled the number of countries bombed by drones. Obama did NOT accelerate the Iraq exit from Bush's negotiated schedule and in fact failed to negotiate a residual force--and in fact has reintroduced military "assistance" and bombing of Iraq. He got UBL based on intelligence gathered from the Bush years and alienated the Pakistan government in the process. Not only that but multiple terror groups have appeared in Libya, Syria, and Iraq, which offset Al Qaeda on the run, ISIS among others.

So, Americans vote for the party that got you into the mess that Obama just dug you out of? This defies reason.

First of all, the GOP was not in control of the Congress at the time of the 2008 economic tsunami, the GOP was not responsible for Fannie Mae and Freddie Mac which used cheap Treasury money to grow the duopoly at the expense of the taxpayer; the Dems were responsible for politicizing conservative homelending policies, Wall Street in fact supported the election of Obama, Obama did not make the decision to deploy counterinsurgency tactics in Iraq--Bush did, and the Dems fought him every inch of the way. Obama didn't do squat to help on anything; he harmed the economy with his healthcare and financial "reforms" and gross overspending; he caused FDR-like regime uncertainty. If the troll means Iraq, remember, unlike Obama, Bush asked for and won a bipartisan vote on the use of force. Bush was not responsible for asset bubbles; the Fed was.

So what is with this Canadian "progressive" troll's inability to see why a majority of American voters disapprove of Obama's performance? There are other issues, like his lawlessness, as well; he has lost more 9-0 SCOTUS votes than any president in memory. He's an economic illiterate, his idea of "compromise" is capitulation on his terms, and he's not trustworthy in his dealings with Congress. Apparently Canadian trolls need to expand their view of America beyond MSNBC and leftist websites.